US GDP Growth Rate Revised Up To 3.5% In Q3


The US economy advanced an annualized 3.5 percent on quarter in the three months to September of 2016, up from 1.4 percent growth in the previous period and better than a 3.2 percent expansion in the second estimate. It is the highest growth rate in two years as personal consumption, investment in structures and intellectual property products and government expenditure rose faster than anticipated and exports were boosted by boom in soybean shipments.

Personal consumption expenditure (PCE) contributed 2.03 percentage points to growth (1.89 percent in the second estimate) and rose 3 percent (2.8 percent in the second estimate). Spending on durable goods jumped 11.6 percent (the same as in the second estimate); services rose faster (2.7 percent compared to 2.5 percent in the second estimate) and spending on nondurable goods fell less (-0.5 percent compared to -0.6 percent in the second estimate).
 
Fixed investment added 0.02 percentage points to growth (-0.15 percentage points in the second estimate) and edged up 0.1 percent, compared to a 0.9 percent contraction in the second estimate. Investment grew faster for infrastructures (12 percent compared to 10.1 percent in the second estimate) and intellectual property products (3.2 percent compared to 1 percent). In addition, investment in equipment fell for the fourth straight quarter although less than anticipated (-4.5 percent compared to -4.8 percent in the second estimate) and residential investment also decreased at a slower 4.1 percent (-4.4 percent in the second estimate).
 
Private inventories added 0.49 percentage points to growth (the same as in the second estimate), the first positive contribution since the first quarter of 2015. Businesses accumulated $7.1 billion worth of inventory.
 
Meanwhile, exports increased 10 percent (10.1 percent in the second estimate), the biggest gain since the last quarter of 2013. Imports rose 2.2 percent (2.1 percent in the second estimate), bringing the impact from trade slightly down to 0.85 percent (0.87 percent in the second estimate).
 
Government spending and investment added 0.14 percentage points to growth (0.05 percent in the second estimate) and rose at a faster 0.8 percent (0.2 percent in the second estimate).

BEA | Joana Taborda | joana.taborda@tradingeconomics.com
12/22/2016 2:27:40 PM